First-Class stamp's price goes up

It isn't skyrocketing like the price of gasoline, but the cost of mailing a first-class letter jumps to 41 cents Monday.

The 2-cent increase comes 16 months after the last postal rate hike on Jan. 8, 2006, when the cost of mailing a letter went from 37 to 39 cents, a U.S. Postal Service spokesman said.

Before that, the 37-cent price had held for nearly four years, since June 30, 2002.

The new rates prices for nearly all mail classifications are going up will bring postal rates in line with what the Postal Service pays to deliver the mail to 146 million homes and businesses six days a week, said Rich Maher, a USPS spokesman in Los Angeles.

The latest increase comes with a twist, a so-called "forever stamp" that will always be valid no matter how much postal rates increase in the future.

That stamp, adorned with an image of the iconic Liberty Bell and priced at 41 cents, went on sale April 12.

It's popular because it locks in the new rate, protecting purchasers from having to buy 1- and 2-cent stamps to cover future increases, Maher said. Consumers had purchased 168,660 forever stamps at post offices in Ventura as of Tuesday.

"A lot of people are rushing out and buying them, but in all honesty they won't be saving any money on it until the next rate increase," Maher said. "That could be a year or two away. This is just a customer convenience, the fact that they can buy 41-cent stamps now and they don't have to worry about buying 2-cent stamps when the rates change."

Maher could not predict when another increase will be needed, but an expert thinks postal rate hikes are about to become an annual annoyance. Charles Guy, former director of the USPS's Office of Economics and Strategic Planning, said rates will almost certainly have to jump annually to cover the Postal Service's mushrooming labor costs.

About 80 percent of USPS spending is for labor, he said, well above the 50 percent that most businesses pay.

"If the Postal Service does not address its ballooning costs, stamp-price increases could become regular events," said Guy, an adjunct scholar with the Lexington Institute, an Arlington, Va., think tank.

He said possible solutions include greater labor flexibility for postal managers, the phasing out of contractual no-layoff provisions, paying new hires market wages instead of premium pay and establishing pay scales based on each region's cost of living.

The first commemorative 41-cent stamps will be a sheet of 15 featuring "Star Wars" characters to be issued May 25. The stamps will mark the 30th anniversary of the "Star Wars" movie. Fans can vote for their favorite stamp and enter a contest to attend a Star Wars convention in Los Angeles by going to http://www.uspsjedimaster.com.

The stamp getting the most votes will be issued again on its own during the summer, Maher said. The Postal Service is also changing the way it charges for mail on Monday, offering lower rates for smaller sizes. Instead of rates based only on weight, charges will be based on a combination of weight and shape. Competitors such as UPS and FedEx have used that combination for years to save money, Maher said.

Beginning Monday, a four-page business letter weighing two ounces sent in a large, flat envelope will cost 97 cents to mail, but the same letter folded into a regular business letter envelope can be sent for 58 cents, a nickel less than it would cost today.

"Within each class category of mail we will also be taking a look at the shape. That sort of just aligns the cost with what the price is," Maher said. "We're saying shape does matter."